By Sharifah Hunaini Syed Ismail, Niam Seet Wei and S.Kisho Kumari
KUALA LUMPUR, Oct 9 (Bernama) -- Malaysia’s Budget 2027, totalling RM459.8 billion, aims to turn resilient economic growth into real gains for the people with better wages, smarter targeted support, stronger fiscal discipline and a bold push towards higher-value industries.
When tabling Budget 2027 in Parliament today, Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, said of the total budget, 30.2 per cent or RM138.85 billion goes to the Ministry of Education (MoE), Ministry of Health (MoH) and Ministry of Defence.
Anwar said the measure of a budget's worth is not the thickness of the document, the size of the allocations or the number of announcements made.
"The measure is far more fundamental, which is whether many more people can live dignified lives, and whether the Malaysia that we will pass on to the next generation is a fairer one from the Malaysia that we inherited,” he said.
Themed “Malaysia MADANI: Menggapai di Langit, Mengakar di Bumi”, the 5th MADANI Budget, is the second Budget under the 13th Malaysia Plan (13MP).
The Prime Minister stressed that the national budget is a moral statement, or national waad (a promise or pledge) of a responsible government.
He said that the country would not abandon those struggling with hardship, and that every Malaysian child, regardless of family background, region or social standing, has the right to realise and fulfil their potential.
“This covenant is not a one-way promise. The nation provides the space and opportunities, while the people make the most of them through knowledge, hard work, creativity and courage.
“The government safeguards the trust placed in it, while the people strengthen the nation through effort and excellence,” he said.
Anwar said the government had heard the concerns of the middle-income group (M40), who had remained patient and resilient despite also being burdened by the rising cost of living.
Hence the government is increasing the individual tax relief limit to RM12,000 from RM9,000, a limit that had remained unchanged since 2010.
At the same time, the government is adopting a progressive approach by adjusting the tax rate for high-income earners with annual incomes exceeding RM1 million to 30 per cent.
To strengthen the bumiputera economy, Anwar said the government has agreed to provide 50 acres (20.23 hectares) of strategic land in the Kuala Lumpur area, valued at RM1 billion, as a new endowment for Yayasan Pelaburan Bumiputra.
At the same time, government-linked investment companies (GLICs) will invest RM2 billion to empower bumiputera companies.
Government-linked companies (GLCs) and Petronas are targeting RM58 billion in procurements from bumiputera companies starting in 2027.
The GLC procurement guidelines, which have not been reviewed since 2006, will also be updated", he said.
The government is also focusing on breaking through economic growth barriers, projecting that gross domestic product (GDP) will continue to expand by between 4.2 and 5.2 per cent in 2027 by maintaining a strong economic foundation although global uncertainty is expected to persist.
Anwar said the government has also listened to the concerns of micro, small and medium enterprises (MSMEs), which are facing rising operating costs.
In response, the government has agreed to reduce the income tax rate for MSMEs by one percentage point.
Following the conflict in West Asia, Bank Negara Malaysia (BNM) has provided up to RM5 billion in financing to assist small and medium-sized enterprises (SMEs) affected by the situation.
“BNM has agreed to provide an additional RM5 billion in financing, as the response to the existing facility has been very encouraging,” he said.
The Prime Minister also said that Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and Credit Guarantee Corporation Malaysia Bhd (CGC) will provide financing of up to RM32 billion next year.
“SJPP's coverage will be expanded to include mid-tier companies across all sectors, with the guarantee limit also increased to RM50 million.
“A total of RM1 billion in SJPP guarantees will be allocated specifically to support the expansion of local companies through mergers and acquisitions (M&A),” he said.
This means the total financing and loan guarantee facilities will be increased from RM50 billion to RM57 billion in 2027.
On trade issues, Anwar said the government is taking the concerns of small traders seriously, particularly regarding the presence of foreign e-commerce companies entering the domestic market without adequate monitoring and enforcement.
“Therefore, the government will promptly examine legislative and enforcement measures to protect local micro, small and medium enterprises (MSMEs) from unfair competition, while also ensuring that goods purchased by the public are safe,” he said.
He added that the E-Commerce Bill will be tabled at the next parliamentary sitting as part of efforts to strengthen the accountability of online platforms and sellers.
To facilitate business operations so it is easier for global companies to operate in Malaysia and bring in top skilled talent, the government will enhance the Global Services Hub (GSH) tax incentives effective Jan 1, 2027.
“Among the measures is a special five per cent tax rate on income derived from GSH activities for new companies,” he said.
To strengthen the cross-border economy, Anwar said he and Singapore Prime Minister Lawrence Wong will launch the Johor-Singapore Special Economic Zone (JS-SEZ) Masterplan and Blueprint at the end of this year.
Anwar said the Fifth MADANI Budget will continue with an expansionary fiscal policy by harnessing the nation's overall resources amounting to RM510 billion.
“Of this amount, RM459.8 billion comprises RM376.8 billion in Federal operating expenditure and RM83 billion in Federal development expenditure,” he said.
The allocation also includes an additional RM25 billion in investments from government-linked investment companies (GLICs), RM11 billion in public-private investments, and RM14.2 billion in investments by federal statutory bodies and Minister of Finance (Incorporated) (MOF Inc) companies.
--BERNAMA